Thursday, May 19, 2011

Economists know about a problem that you cannot solve. It is called “the calculation problem.” The reason you cannot solve this problem, calculating the market clearing price of every good in the world on every market, is because you do not have the necessary information. The nature of the calculation problem is that you *cannot* have the information, because it isn’t available. Market clearing prices are discovered by buyers and sellers in free, unregulated markets, all the time, by the choices of those in the market.

As is often the case with these sorts of things, it is actually worse, in reality, than you might imagine. My friend from Colorado Springs, Keith Hamburger, writes, "The calculation problem is almost certainly even more intractable than presented by Ludwig von Mises. He wasn't aware of the modern mathematics of recursive feedback systems known as chaos/complexity theory when he did the majority of his writing, as it hadn't been developed yet. With every individual having an infinite number of things they can value, and each of those things being infinitely variable and only ordinally measurable, and their values changing moment by moment, and every action or bit of knowledge of billions of individuals influencing the values of each and every other individual, it is absolutely impossible to predict what is the 'correct answer.' There are not enough atoms in the universe to build a computer that is capable of modeling economics."

You may imagine that you are smarter than me, and I’m quite willing to grant it for purposes of discussion. You may believe you are smarter than everyone else, and I grant that, too. But the smartest woman in the world cannot know the needs and wants and temporary emergencies of seven billion people. You cannot know what you need to know to solve the calculation problem.

Yet you demand that we all turn to the government to force our neighbours not to buy things you don’t want them to buy and not to sell things you don’t want them to sell. You demand regulations and prohibitions, you demand price controls, you demand quality controls, and you shriek and gnash your teeth.

It is tiresome. Did prohibiting abortion work? No, it failed. It failed to prevent abortion. It also prevented women from getting abortions in clean clinics, and put them in back alleys being butchered by amateurs.

Did prohibiting alcohol work? No. It failed. It failed to prevent alcohol consumption. Carrie Nation’s dream of a country where women were not beaten senseless by drunk husbands never came to be. Prohibition made bathtub gin contaminated with lead (because it is cheaper to make a still with lead pipes) widely available. It made organised crime much bigger. It justified the existence of the Federal Bureau of Investigation and other national police and espionage forces. But it failed.

Does prohibiting marijuana work? No. It fails. It is currently in the process of once again failing in Montana where dim-witted legislators have hit upon the idea of making criminals out of at least 28,000 of the roughly 30,000 marijuana prescription card holders they demanded be registered in a previous law, after the people of Montana voted 62% in favour (in 2004) of a legalisation scheme. Will they prevent weirdness, as one legislator at a Republican party "Reagan-Lincoln" event recently schemed? No. They will prevent orderly trade and commerce, they will drive the production and use of marijuana underground, they will turn over to federal authorities all the names and addresses they so cruelly demanded, they will gleefully build taxpayer-funded cages to put their neighbours in and gleefully distribute federal block grants to the states to fight the "war on drugs" and with greed all over their chins eagerly accept their cut of civil asset forfeiture money from robbing their neighbours at gunpoint.

And you never learn. You never learn that the government is not real, it is only a fiction. You never learn that the men and women who work for the government are simply men and women. They aren’t superhuman. They have no magic wands. They cannot know enough information to solve the calculation problem.

You demand that we all pay more for everything because you insist on regulations. Well, each American household pays about $15,000 more per year due to regulations, a recent study says. (Cite: http://www.ncpa.org/sub/dpd/index.php?Article_ID=19869 ) On top of that, each American household pays roughly a third of their income in income taxes and payroll taxes, plus another ten percent in other federal taxes, plus another ten percent or more in state and local taxes. Every American would be two to three times wealthier with much less government, and the cost of everything in the market would be reduced with less regulatory and tax burden.

But you don’t care. You don’t care because you demand that the government solve all your problems. You don’t care because you are smarter than everyone, and you know better than your neighbours. You don't care because what you do care about is *important* and what I care about, free people having freedom, doesn't matter to you.

So your government puts 2 million Americans in cages every year for non-violent non-crimes. Your government incarcerates more individuals in total than any other nation in the world and a higher percentage of its population than every other country in the world. Your government tortures people to death. Your government detains people without charges. Your government searches private homes without warrants, without probable cause. Your police and federal agents plant evidence, lie, cheat, steal, rape, murder, and you don't care. Your president has authorised the execution of American citizens without trial. Your president has declared, as commander in chief, at least one soldier (Bradley Manning) guilty without benefit of a trial.

You don’t like the free market because you are a hateful, violent state supremacist. You don’t want free neighbours to express differences of opinion, you want to force them into line.

People are orderly when it pleases them to be orderly. But they aren’t always orderly.

The question is: are you willing to wait for the spontaneity of order by choice, or do you insist upon the calamity of order by force?

And if you force everyone into line, then you get to answer two more questions: Who does your state kill? Why?

The above essay was first written as a comment to a socialistic state supremacist environmentalist on some blog somewhere. Personally, I blame Kent McManigal for putting me on that track. I have above acknowledged Keith Hamburger for the chaos theory comment. While making acknowledgements, I should like to thank Jennifer Lewis for her work researching the $15,000 per household article. If you people were on Facebook, instead of reading this Web 1.0 Libertarian Enterprise, you might like to join our group there.

Thursday, May 5, 2011

Among the things I watch are the London Fix and NY Spot price of silver and the silver to gold ratio based on the same exchanges. In this chart blue in London, Orange is NY, pastel is the ratio and dark is the price.

My intuition tells me something is trying to converge on 38 or 39ish. My intuition also tells me some sort of bifurcation point is approaching.

About Me

Puck T. Smith is the nom de plume of a man who wishes to live his life in peace and obscurity while at the same time sharing the insights he has acquired through both suffering and joy in more than half a century of living in this world of terrible tragedy, radiant beauty and dizzying possibilities.